An "educated guess" analysis of Large no. of Seats in Andhra Pradesh (India) Engg. Colleges Going Empty

Last updated on December 5th 2012

Please note that the data for this analysis has been taken from media (news) articles. There is a possibility of some inaccuracies but even if there are inaccuracies I think the data may not be far off from the real situation on the ground. Further this analysis is in the realm of an "educated guess". It could be proved wrong or in need of alteration in the face of more data, especially from reliable sources.

This "educated guess" analysis is presented roughly in the form of a time-line.

• Union finance minister announces several incentives to provide education loans via nationalized banks in 2004-05, Source: Banks feel the heat of Bad Study loans. From 2005 education loans sector has grown significantly in nationalized banks. As of March 2012, the four South Indian states of Andhra Pradesh (AP), Tamil Nadu (TN), Karnataka and Kerala account for more than 50% of the these education loans provided in the country by nationalized banks, Source: Southern states lead in providing education loans. As per the same source, total education loan disbursed in the country by nationalized banks (public sector banks) as of March 2012 is Rs. 49,069 crore (at Rs. 55 for 1 US $ it is $8.9 billion).

• As money becomes available to students from nationalized banks, new engineering colleges in states like Andhra Pradesh (AP) and Tamil Nadu (TN) started cropping up at a furious rate. AP's engineering colleges grew from 238 colleges in 2004-05 to 717 colleges now (2012-13) i.e. three fold growth in a span of eight years, Source: No new engineering colleges in Andhra Pradesh from next year. As per the same source, the number of engineering seats in AP grew from 82,225 in 2004-05 to 3,44,986 now (2012-13) i.e. over four fold growth in a span of eight years. Most of the new engineering colleges in AP seem to be private (as against central government or state government owned/managed) and possibly created more with a motive of education for profit rather than education as a public service.

• The quality of education offered in the newly created engineering colleges seems to have been not so great. So graduates from these colleges were finding it difficult to land good paying jobs.

• In Andhra Pradesh, a scheme to provide fee reimbursement to marginalized sections of society (Backward Class communities and later extended to Economically Backward Classes) was introduced by the state government in 2008, Source: YSR's fee reimbursement scheme hangs in limbo in Andhra Pradesh. It included engineering, MBA and MCA degree courses/programs. Engineering colleges in rural AP seemed to have benefited from this scheme as they could induct students from these marginalized sections of society and claim fee reimbursement from the government. This seems to have contributed to furious growth of engineering colleges in AP. In 2012-13, the AP state government seems to be struggling to handle the financial burden of this fee reimbursement scheme and seems to have not reimbursed fees to some colleges thereby putting such colleges under financial strain. [This issue was pointed out by a friend.]

• The global financial crisis of 2008, in its aftermath, reduced the number of jobs available for fresh graduates (of all types of educational institutions not just engineering colleges), Source: Banks feel the heat of Bad Study loans. This would have made the situation particularly bad for graduates from those of the newly created engineering colleges which were not imparting good quality education.

• Indian banks started reporting problems of bad study loans! Some graduates (including management college graduates/post-graduates) were getting stuck with a study loan to repay but not getting a decent job with which to pay back the loan, Source: Banks feel the heat of Bad Study loans.

• By 2012-13 academic year, students and parents probably got wise to the situation and became very choosy about which engineering college to join. So now around 50 % of the 3,44,986 seats in AP engineering colleges have gone empty, Source: No new engineering colleges in Andhra Pradesh from next year! Perhaps students and parents have seen some bad study loan cases and are a lot more careful about taking a study loan. Perhaps banks too have become reluctant to lend to students joining some engineering colleges. So engineering colleges which have not earned a good reputation are perhaps being 'weeded out' by students, parents and the banks (the market).

• Rural and semi-urban engineering colleges in AP are facing the heat of students and parents avoiding them and so lobbied the AP state government to introduce a cap in intake of number of students per college (420 or 540) to ensure that city based colleges (which probably have earned a good reputation for the education they impart) do not take up most of the students thereby threatening closure of rural and semi-urban colleges in AP, Source: Rural colleges welcome cap on engineering seats, urban colleges question the move.

• The key regulatory authority to maintain standards of education in these new (and mostly private, it seems) engineering colleges, namely AICTE, a country-wide authority (as against an AP state only authority), seems to have been completely ineffective in its role of maintaining standards of education.

A similar scenario may be getting played out in other states of the country especially other south Indian states of Tamil Nadu, Karnataka and Kerala.

Please note that the Creative Commons Attribution 3.0 Unported License (CC-BY) does *not* apply to this post.